In this Article we updates about the normal and Special Income tax rates applicable to different types of taxpayers for Financial Year 2019-20 and 2020-21 i.e. for assessment year 2020-21 and 2021-22.

Article compiles Normal Income Tax rates for Individual & HUF, Special Income Tax Rate for Individual and HUFs, Normal Income Tax Rate applicable to a firm, Normal Income Tax rates applicable to a domestic company, Special Income Tax rates applicable to a domestic company, Normal tax rates applicable to a foreign company, Normal tax rates applicable to a Co-operative societies, Special tax rates applicable to a Co-operative societies and Normal tax rates applicable to local authorities for Financial Year 2019-20 and 2020-21 i.e. for assessment year 2020-21 and 2021-22.

Income Tax Rates

1. Normal Income tax rates for Individual & HUF for Financial Year 2019-20 & 2020-21

The normal tax rates applicable to a resident individual will depend on the age of the individual. However, in case of a non-resident individual the tax rates will be same irrespective of his age. For the purpose of ascertainment of the applicable tax slab, an individual can be classified as follows:

  • Resident individual below the age of 60 years.
  • Resident individual of the age of 60 years or above at any time during the year but below the age of 80 years.
  • Resident individual of the age of 80 years or above at any time during the year.
  • Non-resident individual irrespective of the age.

Individuals

(Other than senior and super senior citizen)

Net Income Range

Rate of Income-tax

Assessment Year 2021-22

Assessment Year 2020-21

Up to Rs. 2,50,000

Rs. 2,50,000 to Rs. 5,00,000

5%

5%

Rs. 5,00,000 to Rs. 10,00,000

20%

20%

Above Rs. 10,00,000

30%

30%

Senior Citizen

(who is 60 years or more at any time during the previous year)

Net Income Range

Rate of Income-tax

Assessment Year 2021-22

Assessment Year 2020-21

Up to Rs. 3,00,000

Rs. 3,00,000 to Rs. 5,00,000

5%

5%

Rs. 5,00,000 to Rs. 10,00,000

20%

20%

Above Rs. 10,00,000

30%

30%

Super Senior Citizen

(who is 80 years or more at any time during the previous year)

Net Income Range

Rate of Income-tax

Assessment Year 2021-22

Assessment Year 2020-21

Up to Rs. 5,00,000

Rs. 5,00,000 to Rs. 10,00,000

20%

20%

Above Rs. 10,00,000

30%

30%

Hindu Undivided Family (Including AOP, BOI and Artificial Juridical Person)

Net Income Range

Rate of Income-tax

Assessment Year 2021-22

Assessment Year 2020-21

Up to Rs. 2,50,000

Rs. 2,50,000 to Rs. 5,00,000

5%

5%

Rs. 5,00,000 to Rs. 10,00,000

20%

20%

Above Rs. 10,00,000

30%

30%

Surcharge: Surcharge is levied on the amount of income-tax at following rates if total income of an assessee exceeds specified limits:-

Rate of Surcharge

Assessment Year 2021-22 Assessment Year 2020-21
Range of Income

Range of Income

Rs. 50
Lakhs to
Rs. 1
Crore
Rs. 1
Crore to
Rs. 2
Crores
Rs. 2
Crores
to Rs. 5
Crores
Rs. 5
crores
to Rs.
10
Crores
Exceedin g Rs. 10 Crores Rs. 50
Lakhs to
Rs. 1
Crore
Rs. 1
Crore to
Rs. 2
Crores
Rs. 2
Crores
to Rs. 5
Crores
Rs. 5 crores to Rs.

10
Crores

Exceedin g Rs. 10 Crores
10% 15% 25% 37% 37% 10% 15% 25% 37% 37%

Note: The enhanced surcharge of 25% & 37%, as the case may be, is not levied, from income chargeable to tax under sections 111A, 112A and 1 15AD. Hence, the maximum rate of surcharge on tax payable on such incomes shall be 15%.

However, marginal relief is available from surcharge in following manner-

a) in case where net income exceeds Rs. 50 lakh but doesn’t exceed Rs. 1 Crore, the amount payable as income tax and surcharge shall not exceed the total amount payable as income tax on total income of Rs 50 Lakh by more than the amount of income that exceeds Rs 50 Lakhs.

b) in case where net income exceeds Rs. 1 crore but doesn’t exceed Rs. 2 crore, marginal relief shall be available from surcharge in such a manner that the amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 1 crore by more than the amount of income that exceeds Rs. 1 crore.

c) in case where net income exceeds Rs. 2 crore but doesn’t exceed Rs. 5 crore, marginal relief shall be available from surcharge in such a manner that the amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 2 crore by more than the amount of income that exceeds Rs. 2 crore.

d) in case where net income exceeds Rs. 5 crore, marginal relief shall be available from surcharge in such a manner that the amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 5 crore by more than the amount of income that exceeds Rs. 5 crore.

Health and Education Cess: Health and Education Cess is levied at the rate of 4% on the amount of income-tax plus surcharge.

AMT : In the case of a non-corporate taxpayer to whom the provisions of Alternate Minimum Tax (AMT) applies, tax payable cannot be less than 18.5% (+HEC) of “adjusted total income” computed as per section 115JC. For provisions relating to AMT refer tutorial on “MAT/AMT” in tutorial section.

However, w.e.f. Assessment Year 2019-20, In case of a unit located in an IFSC which derives its income solely in convertible foreign exchange, the rate of AMT under section 115JF shall be at the rate of 9% instead of existing rate of 18.50%.

Note: A resident individual (whose net income does not exceed Rs. 5,00,000) can avail rebate under section 87A. It is deductible from income-tax before calculating education cess. The amount of rebate is 100 per cent of income-tax or Rs. 12,500, whichever is less.

Non-resident individual/HUF

Net income range Income-tax rates Health and
Education Cess
Up to Rs. 2,50,000 Nil Nil
Rs. 2,50,000 – Rs. 5,00,000 5% of (total income minus Rs.
2,00,000) [*]
4% of income-tax
Rs. 5,00,000 – Rs. 10,00,000 Rs. 12,500 + 20% of (total income minus Rs. 5,00,000) 4% of income-tax
Above Rs. 10,00,000 Rs. 1,12,500 + 30% of (total income minus Rs. 10,00,000) 4% of income-tax

Surcharge: Surcharge is levied on the amount of income-tax at following rates if total income of an assessee exceeds specified limits:-

Rate of Surcharge

Assessment Year 2021-22 Assessment Year 2020-21
Range of Income

Range of Income

Rs. 50
Lakhs to
Rs. 1
Crore
Rs. 1
Crore to
Rs. 2
Crores
Rs. 2
Crores
to Rs. 5
Crores
Rs. 5
crores
to Rs.
10
Crores
Exceedin g Rs. 10 Crores Rs. 50
Lakhs to
Rs. 1
Crore
Rs. 1
Crore to
Rs. 2
Crores
Rs. 2
Crores
to Rs. 5
Crores
Rs. 5 crores to Rs.

10
Crores

Exceedin g Rs. 10 Crores
10% 15% 25% 37% 37% 10% 15% 25% 37% 37%

However, marginal relief is available from surcharge in following manner-

a) n case where net income exceeds Rs. 50 lakh but doesn’t exceed Rs. 1 Crore, the amount payable as income tax and surcharge shall not exceed the total amount payable as income tax on total income of Rs 50 Lakh by more than the amount of income that exceeds Rs 50 Lakhs.

b) in case where net income exceeds Rs. 1 crore but doesn’t exceed Rs. 2 crore, marginal relief shall be available from surcharge in such a manner that the amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 1 crore by more than the amount of income that exceeds Rs. 1 crore.

c) in case where net income exceeds Rs. 2 crore but doesn’t exceed Rs. 5 crore, marginal relief shall be available from surcharge in such a manner that the amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 2 crore by more than the amount of income that exceeds Rs. 2 crore.

d) in case where net income exceeds Rs. 5 crore, marginal relief shall be available from surcharge in such a manner that the amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 5 crore by more than the amount of income that exceeds Rs. 5 crore.

Health and Education Cess: Health and Education Cess is levied at the rate of 4% on the amount of income-tax plus surcharge.

AMT : In the case of a non-corporate taxpayer to whom the provisions of Alternate Minimum Tax (AMT) applies, tax payable cannot be less than 18.5% (+HEC) of “adjusted total income” computed as per section 1 15JC. For provisions relating to AMT refer tutorial on “MAT/AMT” in tutorial section.

However, w.e.f. Assessment Year 2019-20, In case of a unit located in an IFSC which derives its income solely in convertible foreign exchange, the rate of AMT under section 115JF shall be at the rate of 9% instead of existing rate of 18.50%.

2. Special Income tax Rate for Individual and HUFs for Financial Year 2019-20 & 2020-21

The Finance Act, 2020, has provided an option to Individuals and HUF for payment of taxes at the following reduced rates from Assessment Year 2021-22 and onwards:

Total Income (Rs) Rate
Up to 2,50,000 Nil
From 2,50,001 to 5,00,000 5%
From 5,00,001 to 7,50,000 10%
From 7,50,001 to 10,00,000 15%
From 10,00,001 to 12,50,000 20%
From 12,50,001 to 15,00,000 25%
Above 15,00,000 30%

Surcharge: Surcharge is levied on the amount of income-tax at following rates if total income of an assessee exceeds specified limits:-

Assessment Year 2021-22
Range of Income
Rs. 50 Lakhs to Rs. 1 Crore Rs. 1 Crore to Rs.2 Crores Rs. 2 Crores to Rs. 5 Crores Rs. 5 crores to Rs. 10 Crores Exceeding Rs. 10
Crores
10% 15% 25% 37% 37%

Note: The enhanced surcharge of 25% & 37%, as the case may be, is not levied, from income chargeable to tax under sections 111A, 1 12A and 1 15AD. Hence, the maximum rate of surcharge on tax payable on such incomes shall be 15%.

However, marginal relief is available from surcharge in following manner-

e) in case where net income exceeds Rs. 50 lakh but doesn’t exceed Rs. 1 Crore, the amount payable as income tax and surcharge shall not exceed the total amount payable as income tax on total income of Rs 50 Lakh by more than the amount of income that exceeds Rs 50 Lakhs.

f) in case where net income exceeds Rs. 1 crore but doesn’t exceed Rs. 2 crore, marginal relief shall be available from surcharge in such a manner that the amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 1 crore by more than the amount of income that exceeds Rs. 1 crore.

g) in case where net income exceeds Rs. 2 crore but doesn’t exceed Rs. 5 crore, marginal relief shall be available from surcharge in such a manner that the amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 2 crore by more than the amount of income that exceeds Rs. 2 crore.

h) in case where net income exceeds Rs. 5 crore, marginal relief shall be available from surcharge in such a manner that the amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 5 crore by more than the amount of income that exceeds Rs. 5 crore.

Health and Education Cess: Health and Education Cess is levied at the rate of 4% on the amount of income-tax plus surcharge.

AMT :

The assessee opting for this scheme have been kept out of the purview of Alternate Minimum Tax (AMT). Further the provision relating to the computation, carry forward and set off of AMT credit shall not apply to these assessees.

Note: A resident individual (whose net income does not exceed Rs. 5,00,000) can avail rebate under section 87A. It is deductible from income-tax before calculating education cess. The amount of rebate is 100 per cent of income-tax or Rs. 12,500, whichever is less.

Conditions to be satisfied:

The option to pay tax at lower rates shall be available only if the total income of assessee is computed without claiming following exemptions or deductions:

a) Leave Travel concession [Section 10(5)]

b) House Rent Allowance [Section 10(13A)]

c) Official and personal allowances (other than those as may be prescribed) [Section 10(14)]

d) Allowances to MPs/MLAs [Section 10(17)]

e) Allowances for income of minor [Section 10(32)]

f) Deduction for units established in Special Economic Zones (SEZ) [Section 10AA];

g) Standard Deduction [Section 16(ia)]

h) Entertainment Allowance [Section 16((ii)]

i) Professional Tax [Section 16(iii)]

j) Interest on housing loan [Section 24(b)]

k) Additional depreciation in respect of new plant and machinery [Section 32(1)(iia)];

l) Deduction for investment in new plant and machinery in notified backward areas [Section 32AD];

m) Deduction in respect of tea, coffee or rubber business [Section 33AB];

n) Deduction in respect of business consisting of prospecting or extraction or production of petroleum or natural gas in India [Section 33ABA];

o) Deduction for donation made to approved scientific research association, university college or other institutes for doing scientific research which may or may not be related to business [Section 35(1) (ii)];

p) Deduction for payment made to an Indian company for doing scientific research which may or may not be related to business [Section 35(1)(iia)];

q) Deduction for donation made to university, college, or other institution for doing research in social science or statistical research [Section 35(1) (iii)];

r) Deduction for donation made for or expenditure on scientific research [Section 35(2AA)];

s) Deduction in respect of capital expenditure incurred in respect of certain specified businesses, i.e., cold chain facility, warehousing facility, etc. [Section 35AD];

t) Deduction for expenditure on agriculture extension project [Section 35CCC];

u) Deduction for family Pension [Section 57(iia)]

v) Deduction in respect of certain incomes other than specified under Section 80JJAA, 80CCD(2) and deduction under section 80LA for Unit located in IFSC [Part C of Chapter VI-A].

Total income of the assessee is calculated after claiming depreciation under section 32, other than additional depreciation, and without adjusting brought forward losses and depreciation from any earlier year (if such loss or depreciation pertains to any deduction under the aforesaid sections). Further, loss under the head house property can’t be set off against other heads of Income. Moreover, such loss and depreciation will not be carried forward.

If the assessee has any unabsorbed depreciation, relating to additional depreciation, which has not been given full effect, the corresponding adjustment shall be made to WDV of the block of assets in the prescribed manner

In case the assessee has business or professional income, this option shall be exercised on or before the due date for furnishing the returns of income. Once the assessee has exercised the option for any previous year, it cannot be subsequently withdrawn for the same or any other previous year. The option once exercised for any previous year can be withdrawn only once in subsequent previous year (other than the year in which it was exercised) and thereafter, he shall never be eligible to exercise this option again except where such person ceases to have any business income.

If assessee does not have business or professional income, the option must be exercised along with the return of income for every previous year. If an assessee, after opting for Section 115BAC, claims any of prescribed deduction or allowance in any previous year, then the option to pay tax at concessional rate shall become invalid for that year.

3. Normal Income tax rates applicable to a Partnership firm/ LLP for Financial Year 2019-20 & 2020-21

A firm is taxed at a flat rate of 30%. Apart from tax @ 30%, Health and Education Cess is levied @ 4% of income-tax.

Surcharge : Surcharge is levied @ 12% on the amount of income-tax where net income exceeds Rs. 1 crore. In a case where surcharge is levied, health and education cess of 4% will be levied on the amount of income-tax plus surcharge.

However, marginal relief is available from surcharge in such a manner that in the case of a person having a net income of exceeding Rs. 1 crore, the amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 1 crore by more than the amount of income that exceeds Rs. 1 crore.

AMT : In the case of a non-corporate taxpayers to whom the provisions of Alternate Minimum Tax (AMT) applies, tax payable cannot be less than 18.5% (+SC+HEC) of “adjusted total income” computed as per section 115JC. For provisions relating to AMT refer tutorial on “MAT/AMT” in tutorial section.

4. Normal Income Tax rates applicable to a domestic company for Financial Year 2019-20 & 2020-21

Income-tax rates applicable in case of domestic companies for assessment year 2020-21 and 2021-22 are as follows:

Domestic Company
Assessment Year 2020-21 Assessment Year 2021-22
–  Where its total turnover or gross receipt during the previous year 2017-18 does not exceed Rs. 400 crore 25% NA
–  Where its total turnover or gross receipt during the previous year 2018-19 does not exceed Rs. 400 crore NA 25%
– Any other domestic  company 30% 30%

Surcharge : In addition to tax at above rate, surcharge is levied @ 7% on the amount of income-tax if net income exceeds Rs. 1 crore but does not exceed Rs. 10 crore and @ 12% on the amount of income-tax if net income exceeds Rs. 10 crore. In a case where surcharge is levied, health and education cess of 4% will be levied on the amount of income-tax plus surcharge.

However, marginal relief is available from surcharge in such a manner that in the case of a company whose net income exceeds Rs. 1 crore but does not exceed Rs. 10 crore, the amount payable as income-tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 1 crore by more than the amount of income that exceeds Rs. 1 crore.

In case of a domestic company whose net income exceeds Rs. 10 crore, marginal relief is available from surcharge in such a manner that the amount payable as income-tax and surcharge shall not exceed the total amount payable as income-tax and surcharge on total income of Rs. 10 crore by more than the amount of income that exceeds Rs. 10 crore.

Health and Education Cess: The amount of income-tax and the applicable surcharge, shall be further increased by health and education cess calculated at the rate of four percent of such income-tax and surcharge.

MAT : In the case of a corporate taxpayer to whom the provisions of Minimum Alternate Tax (MAT) applies, tax payable cannot be less than 15% (+HEC) of “Book profit” computed as per section 1 15JB. However, MAT is levied at the rate of 9% (plus surcharge and cess as applicable) in case of a company, being a unit of an International Financial Services Centre and deriving its income solely in convertible foreign exchange. For provisions relating to MAT refer tutorial on “MAT/AMT” in tutorial section.

5. Special Income Tax rates applicable to a domestic company for Financial Year 2019-20 & 2020-21

The special Income-tax rates applicable in case of domestic companies for assessment year 2020-21 and 2021-22 are as follows:

Domestic Company
Assessment Year 2020-21 Assessment Year 2021-22
–  Where it opted for Section 115BA 25% 25%
–  Where it opted for Section 115BAA 22% 22%
–  Where it opted for Section 115BAB 15% 15%

Surcharge : The rate of surcharge in case of a company opting for taxability under Section 115BAA or Section 115BAB shall be flat 10% irrespective of amount of total income.

Health and Education Cess: The amount of income-tax and the applicable surcharge, shall be further increased by health and education cess calculated at the rate of four percent of such income-tax and surcharge.

MAT : The domestic company who has opted for special taxation regime under section 115BAA & 115BAB is exempted from provision of MAT. However, no exemption is available in case where section 1 15BA has been opted.

In that case, the provisions of Minimum Alternate Tax (MAT) applies, tax payable cannot be less than 15% (+HEC) of “Book profit” computed as per section 1 15JB. However, MAT is levied at the rate of 9% (plus surcharge and cess as applicable) in case of a company, being a unit of an International Financial Services Centre and deriving its income solely in convertible foreign exchange. For provisions relating to MAT refer tutorial on “MAT/AMT” in tutorial section.

6. Normal Income tax rates applicable to a foreign company

A foreign company is taxed at a flat rate of 40%. Apart from tax @ 40%, Health and Education Cess is levied @ 4% of income-tax.

Surcharge : In addition to tax at above rate, surcharge is levied @ 2% on the amount of income-tax if net income exceeds Rs. 1 crore but does not exceed Rs. 10 crore and @ 5% on the amount of income-tax if net income exceeds Rs. 10 crore. In a case where surcharge is levied, health and education cess of 4% will be levied on the amount of income-tax plus surcharge.

However, marginal relief is available from surcharge in such a manner that in the case of a foreign company whose net income exceeds Rs. 1 crore but does not exceed Rs. 10 crore the amount payable as income-tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 1 crore by more than the amount of income that exceeds Rs. 1 crore.

In case of a foreign company whose net income exceeds Rs. 10 crore, marginal relief is available from surcharge in such a manner that the amount payable as income-tax and surcharge shall not exceed the total amount payable as income-tax and surcharge on total income of Rs. 10 crore by more than the amount of income that exceeds Rs. 10 crore.

MAT : In the case of a corporate taxpayer to whom the provisions of Minimum Alternate Tax (MAT) applies, tax payable cannot be less than 15% (+HEC) of “Book profit” as per section 1 15JB. However, as per Explanation 4 to section 1 15JB as amended by Finance Act, 2016 with retrospective effect from 1/4/2001, it is clarified that the MAT provisions shall not be applicable and shall be deemed never to have been applicable to an assessee, being a foreign company, if—

(i) the assessee is a resident of a country or a specified territory with which India has an agreement referred to in sub-section (1) of section 90 or the Central Government has adopted any agreement under sub-section (1) of section 90A and the assessee does not have a permanent establishment in India in accordance with the provisions of such agreement; or [As amended by Finance Act, 2016] (ii) the assessee is a resident of a country with which India does not have an agreement of the nature referred to in clause (i) and the assessee is not required to seek registration under any law for the time being in force relating to companies. For provisions relating to MAT refer tutorial on “MAT/AMT” in tutorial section.

7. Normal Income tax rates applicable to a Co-operative societies

Net income range Rate of income-tax
Up to Rs. 10,000 10%
Rs. 10,000 – Rs. 20,000 20%
Above Rs. 20,000 30%

Apart from tax at above rate, Health and Education Cess is levied @ 4% of income-tax.

Surcharge : Surcharge is levied @ 12% on the amount of income-tax where net income exceeds Rs. 1 crore. In a case where surcharge is levied, HEC of 4% will be levied on the amount of income-tax plus surcharge.

However, marginal relief is available from surcharge in such a manner that in the case of a person having a net income exceeding Rs. 1 crore, the amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 1 crore by more than the amount of income that exceeds Rs. 1 crore.

AMT : In the case of a non-corporate taxpayer to whom the provisions of Alternate Minimum Tax (AMT) applies, tax payable cannot be less than 18.5% (+SC+HEC) of “adjusted total income” computed as per section 1 15JC. For provisions relating to AMT refer tutorial on “MAT/AMT” in tutorial section.

8. Special Income tax rates applicable to a Co-operative societies

The Finance Act, 2020 has inserted a new section 115BAD in Income-tax Act to provide an option to the co-operative societies to get taxed at the rate of 22% plus 10% surcharge and 4% cess. The resident co-operative societies have an option to opt for taxation under newly section 115BAD of the Act w.e.f. Assessment Year 2021-22. The option once exercised under this section cannot be subsequently withdrawn for the same or any other previous year.

If the new regime of Section 115BAD is opted by a co-operative society, its income shall be computed without providing for specified exemption, deduction or incentive available under the Act. The societies opting for this section have been kept out of the purview of Alternate Minimum Tax (AMT). Further, the provision relating to computation, carry forward and set-off of AMT credit shall not apply to these assessees.

The option to pay tax at lower rates shall be available only if the total income of co­operative society is computed without claiming following exemptions or deductions:

a) Deduction for units established in Special Economic Zones (SEZ) [Section 10AA];

b) Additional depreciation in respect of new plant and machinery [Section 32(1)(iia)];

c) Deduction for investment in new plant and machinery in notified backward areas [Section 32AD];

d) Deduction in respect of tea, coffee or rubber business [Section 33AB];

e) Deduction in respect of business consisting of prospecting or extraction or production of petroleum or natural gas in India [Section 33ABA];

f) Deduction for donation made to approved scientific research association, university college or other institutes for doing scientific research which may or may not be related to business [Section 35(1) (ii)];

g) Deduction for payment made to an Indian company for doing scientific research which may or may not be related to business [Section 35(1)(iia)];

h) Deduction for donation made to university, college, or other institution for doing research in social science or statistical research [Section 35(1) (iii)];

i) Deduction for donation made to National Laboratory or IITs, etc. for doing scientific research which may or may not be related to business [Section 35(2AA)];

j) Deduction in respect of capital expenditure incurred in respect of certain specified businesses, i.e., cold chain facility, warehousing facility, etc. [Section 35AD];

k) Deduction for expenditure on agriculture extension project [Section 35CCC];

l) Deduction in respect of certain incomes other than specified under Section 80JJAA [Part C of Chapter VI-A].

Where a co-operative society exercises option for availing benefit of lower tax rate under section 115BAD, it shall not be allowed to claim set-off of any brought forward losses or depreciation attributable to any restricted exemption or deduction in the Assessment Year for which the option has been exercised and for any subsequent Assessment Year.

9. Normal Income tax rates applicable to local authorities

A local authority is taxed at a flat rate of 30%. Apart from tax @ 30%, Health and Education Cess is levied @ 4% of income-tax.

Surcharge : Surcharge is levied @ 12% on the amount of income-tax where net income exceeds Rs. 1 crore. In a case where surcharge is levied, HEC of 4% will be levied on the amount of income-tax plus surcharge.

However, marginal relief is available from surcharge in such a manner that in the case of a person having net income exceeding Rs. 1 crore, the amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 1 crore by more than the amount of income that exceeds Rs. 1 crore.

AMT : In the case of a non-corporate taxpayer to whom the provisions of Alternate Minimum Tax (AMT) applies, tax payable cannot be less than 18.5% (+SC+HEC) of “adjusted total income” computed as per section 1 15JC. For provisions relating to AMT refer tutorial on “MAT/AMT” in tutorial section.

However, w.e.f. Assessment Year 2019-20, In case of a unit located in an IFSC which derives its income solely in convertible foreign exchange, the rate of AMT under section 11 5JF shall be at the rate of 9% instead of existing rate of 18.50%.

Republished with amendment.

(Source- Income Tax Act, Rules and http://www.incometaxindia.gov.in/ )

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20 Comments

  1. N Srinivasa Rao says:

    Can you clarify that an amount of Rs.2.75 lakhs spent on bullectomy surgery is exempted from Income tax under 80 DDB. I have not utilized to get either from parent dept. or health insurance

  2. Radhakrishnan.V says:

    Sir,
    Greetings to you. I desire a clarification.Will you please clarify.
    I want to submit my IT Returns for FY 2017-18 (A.Y 2018-19 )
    In the recent budget standard deduction of Rs.40000.00 is allowed for salary class and pensioners and from interest income an amount upto 50000.00 can be deducted.
    Kindly clarify whether this provision is applicable for FY 2017-18 income to be assessed 2018-19 or it is applicable for income in FY 2018-19
    V.Radhakrishnan

  3. benjack says:

    Requesting clarification for the question raised by an employee;

    I have submitted a ‘ No PAN’ declaration from landlord wherein the landlord signed that he /she does not have any taxable income and hence have no PAN.
    I submitted rental agreement along with rental receipts also.
    But my company doesn’t accept those as stating the reason ” Staff who had paid rent in excess of Rs.1 lakh per annum have not submitted PAN of the landlord. It is mandatory for the employer to obtain PAN of the landlord for granting HRA exemption to staff”. And revoked my HRA exemption claim.
    Please advise whether this decision from the company is right or wrong?.
    Please support.

  4. I. Tripathi. says:

    Whether Concurrent Charge Allowance is taxable income.
    Whether any benifits/ exemption/deduction is available for individual having mentally chellenged child ?

  5. yashpal says:

    the amount payable as income tax and surcharge shall not exceed the total amount payable as income tax on total income of Rs 50 Lakh by more than the amount of income that exceeds Rs 50 Lakhs. please tell me means of this.

  6. B J BAJAJ says:

    Interest on Investment in fixed deposits in psu banks are deductible to the extent of Rs. 1,,00,000/- for PY2016-17 (AY 2017-18) : Please confirm.

    THANKS

  7. keshav patil says:

    Sir,
    Recently I sold my vehicle (Tipper) so got 600000 by cheque. I used the money for paying my ‘finance loan of tipper’ by using those money.
    Now will pay income tax for that amount (Rs 600000) ?
    Will it is called the income?

  8. RAVI SV says:

    Dear sir, i am aged 60 years + and recently resigned from a pvt company on 31st,July’1956 ( which is my date of birth also).
    I am offered SA ( Super annuation) of Rs 9.0 lakhs thru LIC and asked to give the declaration whether i require 30% as withdrawal and balance as pension
    or 100% as with drawl., am already in 30% tax slab this year.

    if i with draw 100% this year, will it attract income tax, please clarify.
    Regards,
    Ravi SV

  9. K E B Rangarajan, Retd AddlCIT says:

    As per recent clarification, For Senior citizens .i.e. 60 yrs age must be born on or before 1-4-1957 and and for 80 years born on or before 1-4-37
    and not
    Resident individual of the age of 60 years or above at any time during the year but below the age of 80 years. (i.e. born during 1-4-1937 to 31-3-1957) Resident individual of the age of 80 years or above at any time during the year. i.e. born before 1.4.1937 –

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